LONDON, Oct 15 (Reuters) - The former head of environmental products at French utility EDF’s U.S. trading arm has this week launched a London-based trading firm specialising in commodities that help reduce greenhouse gas emissions.
Nehme Commodities will trade in ethanol, biodiesel, biomass and biochemicals, and then expand into climate bonds, green and carbon certificates, and other climate risk products, founder and chief executive Fabio Nehme told Reuters.
Nehme noted that while international negotiations to agree a new global climate change treaty are advancing slowly, there is significant progress being made at national and sub-national levels towards curbing the growth of greenhouse gas emissions.
“A number of (emissions trading) schemes are being implemented around the world, with more being considered. Many countries also use RECs (renewable energy certificates) and have biofuel programmes,” he said.
“There’s a lot happening from the bottom up ... (and) it’s starting to create substantial markets for these commodities, which are now maturing fast enough to require trading companies that specialise in them.”
Nehme, who left EDF in July, was senior vice president and general manager of EDF Trading’s Houston-based environmental products division for four years. Before that, he worked in the Environmental Finance Unit at the World Bank’s International Financial Corporation (IFC).
Nehme Commodities employs seven people in London, and has commercial representatives in more than a dozen countries from Latin America to Africa to Southeast Asia.
Following the 2009 global economic crisis, climate change dropped down the political agenda as governments focused on rebuilding their economies.
That eventually led to a number of banks pulling out of markets linked to climate change, reducing liquidity.
“While on the one hand the exit of banks removed competitors from these markets and opened the door to new entrants, it made financing for commodities trading more challenging,” Nehme said.
He added that Nehme Commodities would initially focus on trading on behalf of clients, but could start proprietary trading “down the road”. (Reporting by Michael Szabo; Editing by David Evans)